This Week’s Economic Roundup

Despite gains in sales and profits, small-business owners' outlook on the economy darkened last month, while stores, restaurants, and industrial producers saw business picking up. Here's a look at this week's economic developments and how they may impact your business.

Owner Optimism Flagging

The mood among the nation's small-business owners unexpectedly soured in March, even as sales and profit trends remained strong, the National Federation of Independent Business reported Tuesday.

A downturn in job-creation plans and openings, along with lower sales expectations and a more pessimistic outlook on general business conditions, dragged the Washington-based lobby group's monthly optimism index down 3.5 points to 98, two points below its 30-year average.

The index is based on survey results from about a quarter of the group's 600,000 small-business owners nationwide.

"Something spooked small-business owners in March about the future course of the economy," William Dunkelberg, the NFIB's chief economist, said in a statement.

The declines could indicate business owners believe the economy is strong, but not likely to get any stronger, Dunkelberg said.

Just 24% reported plans to create new jobs over the next three to six months, while only 31% were planning capital expenditures -- less than quarter described the current period as a good time to expand, the survey showed.

On the other hand, a full 27% reported higher sales and lower inventories in March, the report said.

By contrast, consumer optimism earlier this month was on the rise, according to a report by University of Michigan on Thursday.

The university's monthly consumer sentiment index climbed to 89.2 from 88.9 in March, the report said.

Sales, Production Gains

Retail and food-service sales across the nation reached $361 billion in March, an increase of 0.6% over February and up 7.9% from the previous year, the Commerce Department reported Thursday.

Led by sales of building material and garden equipment and supplies, which rose by 17.9% over March 2005, retail trade sales were up 0.7% from February, the report said.

The results were based on a survey of some 5,000 stores, restaurants, and other outlets nationwide.

Industrial production was also on the rise in March, gaining 0.6% over February and 3.6% ahead of the same period in 2005, the Federal Reserve reported Friday.